Stitch Fix (SFIX) Stock Forecast & Price Target

Stitch Fix Inc. projects an increase in sales for FY26, targeting $1.28B to $1.33B, reflecting a year-over-year growth of 1% to 5%. In the first quarter, total revenue surged by 7.3% to $342MM, surpassing both market consensus and the company's own revenue guidance, while the Average Order Value (AOV) increased by 7.6% due to a strategic refresh in the merchandise mix. Additionally, the women's segment demonstrated strong performance with a notable 19% year-over-year growth in key apparel categories as the company aims to support larger fixes with increased inventory, suggesting robust demand and effective inventory management.

Stitch Fix Inc. reported a contraction in adjusted EBITDA margin to 3.9% for the first quarter, representing a decline of 30 basis points year-over-year, alongside a decrease in active clients by 5.2% to 2.307 million. The company's gross margin also fell by 180 basis points to 43.6%, undershooting both consensus expectations and prior forecasts, indicative of heightened pricing pressure and declining client engagement. Moreover, the adjusted EBITDA margin outlook for the full year has been revised downward, now expected to range between 2.3% and 3.4%, reflecting ongoing challenges in client retention and revenue growth per client despite slight improvements in net revenue.